September is "Life Insurance Awareness Month"

By Maryalene LaPonsie on September 1st, 2013

Tapping retired NFL quarterback Boomer Esiason as a spokesperson, life insurance industry groups are hoping the 2013 Life Insurance Awareness Month will convince more consumers to buy the coverage they need.

It is the 10th anniversary of the annual month, but insurance groups say the amount of life insurance coverage Americans carry has actually declined in recent years. To help refocus consumers on the importance of life insurance, industry organizations have chosen 'Life Happens' as the theme for this year's observation of Life Insurance Awareness Month.

Life insurance coverage declining

Although life insurance, particularly term life plans, can be affordable, coverage has actually been declining in recent years. Industry group LIMRA notes the average amount of coverage for U.S. adults has dropped $30,000 since 2004.

The decline may be partially a result of the perceived price of insurance. LIMRA found 86 percent of those who believe they need life insurance have not purchased coverage because they think it is too expensive.

However, healthy individuals may be able to buy substantial coverage for only a few dollars a month. Insurer USAA notes on its website that a healthy 30 year old man may be able to buy a 20 year term life policy with a $250,000 death benefit for less than $15 a month.

Americans have other financial priorities

According to LIMRA, 30 percent of U.S. households have no life insurance coverage. Furthermore, only 44 percent have individual coverage. That means many households may be relying on group coverage obtained through their workplace. Although these plans offer affordable life insurance, they may leave a household uninsured and vulnerable should an individual leave or lose their job.

LIMRA notes half of U.S. households say they need more life insurance, but disposable income is at an all-time low. In addition, more than half of consumers say paying for everyday expenses such as food and transportation makes it difficult to save for their financial goals.

When it comes to goals, 67 percent of those surveyed by LIMRA say saving for retirement is their top financial issue. Less than 40 percent cited top issues, such as premature death, funeral expenses and leaving an inheritance, that could be addressed by a term life or whole life policy.

Industry groups involved in the promotion of "Life Insurance Awareness Month" include LIMRA, the Life and Health Insurance Foundation for Education, and the National Association of Insurance and Financial Advisors.